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June 5, 1970
Honorable F. Pat Wanamaker
State Representative, 10th District
Route 1, Box 193A
Coupeville, Washington 98239
Cite as: AGLO 1970 No. 88
This is written in response to your letter previously acknowledged in which you requested the advice of this office on a matter relating to the scope and effect of certain amendments made by the legislature to the school district budget law by the enactment of chapter 119, Laws of 1969, Ex. Sess. We paraphrase your inquiry as follows:
Does the procedure prescribed by § 3, chapter 119, Laws of 1969, Ex. Sess. (RCW 28.65.095) now constitute the exclusive method whereby a school district may be authorized to incorporate in the revenue section of its preliminary or final budget the total amount of anticipated funds to be derived from a special excess levy assuming only one‑half of the amount will be received in cash by the district during the fiscal year for which the budget is being prepared?
We answer the question in the affirmative.
A school district, as a municipal corporation has only those powers expressly granted by the legislature, those necessary or fairly implied in or incident to the powers granted, and those essential to the declared objects and purposes of the municipal corporation. Seattle High School Ch. No. 200 v. Sharples, 159 Wash. 424, 293 Pac. 994 (1930); Juntila v. Everett School Dist. No. 24, 178 Wash. 637, 35 P.2d 78 (1934).
The statutes governing the preparation and adoption of school district budgets are to be found, as codified, in chapter 28.65 RCW. RCW 28.65.095, codifying § 3, chapter 119, Laws of 1969, Ex. Sess., provides as follows:
"The revenue section of the final budget shall set forth the estimated receipts from all sources for the current fiscal year, the actual receipts for the last completed fiscal year, the actual receipts for the year prior to the last completed fiscal year, and the cash on hand [[Orig. Op. Page 2]] available for current fiscal year disbursements at the close of the last completed fiscal year. The estimated receipts from all sources for the current fiscal year shall not include any revenue not anticipated to be received in cash during that fiscal year.
"The expenditure section of the final budget shall set forth by detailed items or classes the estimated expenditures for the current fiscal year, the actual expenditures for the last completed fiscal year, and the expenditures for the year prior to the last completed fiscal year. Each salary shall be set forth separately, together with the title or position of the recipient: Provided, That salaries may be set out in total amounts under each budget class if a detailed schedule of such salaries and positions be attached to the budget and made a part thereof.
"The estimated disbursements consistent with the provisions of RCW 28.65.170 for the current fiscal year must not be greater than the total of the net cash balance and the investments at the close of the last completed fiscal year plus the estimated cash receipts for the current fiscal year: Provided, When a school district board is unable to prepare a budget in which the estimated cash receipts for the current fiscal year plus the cash and investments on hand at the close of the preceding fiscal year do not at least equal the estimated disbursements for the current fiscal year, the school district board will petition in writing on or before the fifteenth day of September the state superintendent of public instruction for permission to include receivables collectible in future years, in order to balance the current fiscal year's budget. If such permission is granted it shall be in writing and it shall contain conditions, binding on the district, designed to improve the district's financial condition. Any budget adopted by the board of directors without written permission from the state superintendent of public instruction that contains estimated disbursements in excess of the total of estimated cash receipts for the current fiscal year plus net cash balance and investments at the close of the last completed fiscal year shall be null and void and shall not be considered an appropriation." (Emphasis supplied.)
[[Orig. Op. Page 3]]
Our court has said that where a statute, such as RCW 28.65.095, is plain, clear and unambiguous there is no room for construction or interpretation because the intent of the legislature is to be derived from the language of the statute itself. See, King County v. City of Seattle, 70 Wn.2d 988, 425 P.2d 887 (1967); Krystad v. Lau, 65 Wn.2d 827, 400 P.2d 72 (1965). Furthermore, where a board is charged by statute with a specific duty and the means for its performance are appointed by law there is no room for implied powers and the means appointed must be followed. See, State ex rel. Eastvold v. Maybury, 49 Wn.2d 533, 304 P.2d 663 (1956).
Therefore, unless a school district seeks and obtains the approval of the state superintendent of public instruction to include within its budget "receivables collectible in future years," in the manner provided in RCW 28.65.095, supra, it may only set forth in the revenue section of its budget the estimated receipts from all sources which will be received in cash during the current school fiscal year.
A school district fiscal year, unlike that of other municipal corporations and counties, is not based upon the calendar year. Instead, school districts operate on a fiscal year commencing July 1 and ending June 30. RCW 28.01.020. The significance of this fact, as it relates to the preparation of school district budgets, is that tax levies within, or those in excess of the constitutional 40 mill limit (when approved by the voters), are placed on the tax rolls in October of each year but are not collectible until the calendar year ‑ and then they may be payable in two installments ‑ the first in April, the second in October. See, RCW 84.56.020. Thus, for example, a school district in budgeting for the 1970-71 school year (July 1, 1970 to June 30, 1971) may only budget tax revenue that it estimates will be received in cash during the period ‑ that is, the last installment of 1970 taxes payable in October, 1970, and the 1971 taxes it estimates will be received in April, 1971.
It follows that any second installment payments of 1971 taxes ‑ within or in excess of the 40 mills ‑ may not be considered in the preparation of the budget notwithstanding the fact taxes have been levied during the budget period, since they will not be received in cash during the school district fiscal year for which the particular budget is drawn.
[[Orig. Op. Page 4]]
If a school district is unable to balance its budget on the basis of cash receipts, then its only recourse is to utilize the procedure prescribed by the legislature in RCW 28.65.095, supra; to-wit:
". . . petition in writing on or before the fifteenth day of September the state superintendent of public instruction for permission to include receivables collectible in future years, in order to balance the current fiscal year's budget. If such permission is granted it shall be in writing and it shall contain conditions, binding on the district, designed to improve the district's financial condition. . . ."
The legislature not having excluded revenue to be derived in the future through approved excess levies from "receivables collectible in future years," it would appear that the state superintendent can legally consider and approve a budget based on such anticipated revenue if necessary to balance the budget.1/ This conclusion is consistent with the administrative construction placed upon the budget law by the state superintendent in a memo of May 27, 1970, entitled "Guidelines for Review of Preliminary Budget." Therein he stated:
". . . Special levies for 1970 collection passed after April 18, 1969 may be included in the 1969-70 preliminary budget to the extent of the estimated amount that will be collected in fiscal 1969-70. If necessary, such levies may be included in the final budget up to 100% after obtaining prior written permission of the State Superintendent of Public Instruction."
[[Orig. Op. Page 5]]
Therefore, in answer to your question, as paraphrased at the outset, it is our opinion that in so far as the preparation, review and approval of the budget of a school district is concerned, the funds to be derived from an excess levy may only be included in the revenue section if (1) it is anticipated that the tax funds will be received, in cash, during the budget period; or (2) the district petitions and obtains the approval of the state superintendent as provided for in RCW 28.65.095, supra.
We trust the foregoing will be of assistance to you.2/
Very truly yours,
ROBERT J. DORAN
Deputy Attorney General
ROBERT E. PATTERSON
Assistant Attorney General
*** FOOTNOTES ***
1/Whether the excess levy proposition approved by the people contained or did not contain a provision authorizing the district to immediately issue interest bearing warrants to be funded out of the levy is immaterial in the context of our present discussion. The authority vested in the state superintendent is not limited or restricted except to the extent expressly provided in RCW 28.65.095, supra.
2/We have not been concerned herein with the procedures to be followed by districts to cope with emergencies which arise after the approval of the final budget. However, the provisions governing such situations are also set forth in chapter 28.65 RCW.